PMAC 2012: Designing a web-based procurement module

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Moncton, NB: Ten years ago High Liner Foods started working on a web-based procurement module and they are still working on it now.

That doesn’t mean the module’s not functioning, but as the company’s CIO Peter Burns said in a presentation at the 2012 PMAC national conference on June 8, “The only way to eat an elephant is one bite at a time.” In other words, the development and refinement of the procurement module has been an ongoing process.

High Liner is a global company with almost $1 billion in sales. It styles itself the largest North American vendor of “value-added” seafood, but it has no fishing fleet of its own, instead sourcing from around the world and processing the catch in six North American manufacturing sites. Its brands include: Viking, High Liner, Icelandic, Mirabel and FPI.

The company buys 215 million pounds of seafood each year, spending approximately $600 million. This includes 30 species purchased from 30 countries. It is the world’s largest procurer of cod.

The procurement team is located throughout the 30 countries and they deal with a limited number of trusted suppliers. All product High Liner buys is inspected at the source and suppliers are required to comply with the Global Food Safety Initiative regulations.

The need for the sourcing hub was identified as a strategic objective for the company, Burns said, and the company’s leadership was focused on the change. The objective was to use technology as a differentiator from the competition.

The web-based system allows all the stakeholders in the inbound supply chain to see each step in the process. For example, suppliers can see the specifications for all the products they are making through the procurement system interface. Product can be tracked right through from the supplier to when it clears Customs to when the truck is scheduled to arrive at the plant. The visibility is so good that the location of specific products can be pinpointed within the container they are arriving in, a feature which Burns says is crucial for saving time in the quality control process. Suppliers can also check on how the quality inspections went, and they can see when an invoice has been paid.

According to Burns, High Liner is benefiting from the system through better communications, fewer errors, saved time that allows for a focus on improving products and processes, faster decisions, more accurate inventory control, better quality and smoother supplier management. It also supports sustainability and traceability efforts.

Success was achieved, Burns said, because it was a procurement project from the start — not an IT project. The Information Services department was brought in as a business partner in the project, supporting the procurement team. Everyone involved was fully empowered to make suggestions and had the power to effect change.

They used a prototyping methodology, avoiding traditional programming modes, and worked from a model of continuous improvement. Process improvements were led by the business experts, not the IS department team members. The catchphrase was: Simplify, Standardize, Centralize and Automate.

For Burns, the lessons to share from this experience are:

Procurement must own the project, not IT.

Create the right working relationships.

Project management is key. Their team still meets monthly to discuss progress and changing business needs.

Training is critical – time spent on training saves time later. High Liner found that suppliers in remote areas may not have same skill sets as people in the home office so you need intuitive and easy systems and they need to be atrained on them.

Eat the elephant one bite at a time. That’s why the project is a journey of continuous improvement.

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